The Lowly Thermostat, Now Minter of Megawatts

http://www.technologyreview.com/news/527366/the-lowly-thermostat-now-minter-of-megawatts/?

by jonathansizz • 12 years ago

42 36 12 years ago

lutorm7• 12 years ago

The utilities pay Nest $25 + $15/year for each Nest owner that agrees to sign up, while the owner gets a one-time $85 rebate. Excuse me?

I'm all for helping lower peak demand, but if the utilities are going to be saving billions, I think this should reflect an ongoing savings for the customers, too.

erichurkman2• 12 years ago

Don't customers also receive a benefit by having a lower utility bill?

nostromo• 12 years ago

It depends on which Nest feature we're talking about.

The consumer clearly benefits from not air conditioning an empty home.

But, the article conflates this with "demand response" -- which is more about time-shifting your electrical usage to avoid peak times than it is about reducing your energy usage. The meter will read the same, but it's a huge benefit to the utilities.

A simple way to fix this: price energy more expensively during peak times.

rgbrenner• 12 years ago

$85 per household in the US is nearly $10billion.. and $15/yr is $1.75B/yr

The article only says the utilities will save 'billions'.. so this may be fair or not.. without additional info, how can you say?

lutorm7• 12 years ago

I mean a onetime reward against an ongoing saving has to become unfair at some point in time.

brk• 12 years ago

That doesn't seem all that unbalanced to me.

First off, Nest is a business, they're looking for revenue out of this.

Secondly, $85 = $25 + 4 years @$15/yr. So in essence Nest only makes money on this after 4 years. As cool as Nest is, it's not unreasonable to assume that if this catches on other companies might pursue similar programs. Which means that Nest user might be swapping out their thermostat in 4 or 5 years for the then-newest thing.

$85 to the customer doesn't seem like such a bad deal in the grand scheme of things, and as others have said, the customer gets other significant benefits out of the Nest thermostat all along the way.

lutorm7• 12 years ago

Yeah, that's fair. I guess it's not clear if the $85 is for signing up for this Nest feature or for signing up for demand response in general.

NoMoreNicksLeft• 12 years ago

Looks like most of Texas has it. Too bad I'm up in the panhandle.

masonhensley• 12 years ago

This is cool, few years ago, I interned for the Tennessee Valley Authority on their Energy Efficiency and Demand Response team. The bulk of our peak demand savings came from industrial customers [1] but we did have a program for residential users, but it was more on the general efficiency side [2].

[1] http://www.enernoc.com/our-resources/brochures-faq/faq-tenne...

[2] http://www.energyright.com/residential/

xtirpation• 12 years ago

Am I missing something here? I'm genuinely curious why anyone would think it's a good idea to surrender control over something that directly affects their everyday comfort, especially if it's air conditioning in Texas.

skybrian• 12 years ago

It partially compensates by cooling the house down before peak. Also, you can override it at any time and it will learn what you want. The point is to find ways to cut back that don't affect comfort.

lutorm7• 12 years ago

Rolling blackouts due to insufficient capacity impacts your everyday comfort a lot more...

tedsanders2• 12 years ago

It's a good idea if the money you're paid outweighs the discomfort you feel.

This is an attempt to find a consensual market solution to the problem of building expensive peaker plants that operate perhaps a day a year. The marginal cost of electricity generation capacity is astoundingly high.

Part of Nest's angle is that Nest can learn and detect whether you are home. This lets the thermostat save you money when you're not home - and this is the key - it does so without any thought or input or effort by the customer.

tomohawk• 12 years ago

With solar on the roof, I'm putting power onto the grid during those peak times. Maybe if they paid for more peak power, more people would put on solar, which would provide peak output when AC is most needed.

Seems less invasive than tracking when I tend to be home or not home. Next up, they'll track where I'm driving and only turn on the heat/AC when I appear to be heading home. I wonder who else would find that kind of info useful.

lutorm7• 12 years ago

Yeah it seems PV generation and AC is a good match, except that peak load happens later than peak production since temps peak in the afternoon and AC use goes up as people get home.

amit_m2• 12 years ago

This indiegogo campaign launched 2 days ago is doing a "Nest for split A/Cs": http://igg.me/at/sensibo/x

Hopefully they can help the rest of the world become more energy efficient. Thermostats are not common outside the US.

scott_karana• 12 years ago

Thermostats are not common outside the US.

Do you have a source backing that up? I was in Germany last summer, and they seemed to be just as ubiquitous. (both in Berlin and Munich)

eitally• 12 years ago

Perhaps a more accurate statement would have been "thermostats are not common in countries where typical residential construction does not include accommodations for central heat/air." Good examples: Brazil, India & China. Sure, a window unit or ceiling mounted a/c will probably have a remote control and a digital display thermostat, but that is not nearly what this is about.

amit_m2• 12 years ago

Just my experience. The systems you are referring to are most-likely residential heating systems, and not full-blown HVAC system that are based on a heat pump.

Asia: I have traveled for months in China, India and Japan and don't recall seeing any thermostats, aside from hotels and commercial spaces.

Europe: no A/C in most countries (aside from commercial projects). They make extensive use of residential heating using liquid pipes that pass through the building. In southern europe split ductless A/C systems are common.

South america: I believe they have both central air and split systems.

USA: central air everywhere!

Africa: no money for A/C. ;-)

The split systems are much more energy efficient, so they should be gaining ground.

brucehart• 12 years ago

I can imagine a future where energy is priced in real time. The only reason it hasn't been done so far is that it wasn't technically practical until recently. Imagine if you could tell your Nest to optimize the comfort of your house and keep it below a projected budget. If battery technology progresses, the Nest could even one day store energy at low points and use the battery at more expensive times.

tedsanders2• 12 years ago

There are many reasons it hasn't been done besides technical practicality. Besides the obvious issues of market manipulation (ala Enron) and information security (sending false prices to cause blackouts), there is a giant problem with customer acceptance. Most people don't like bills that are unpredictable, they don't like bills that are hard to understand, and they don't like change. I'm a big fan of real-time energy pricing but you have to understand that the technical problems are really quite minor compared to the market design and consumer acceptance problems.

I'm also somewhat skeptical of personal batteries being used to save on your electric bill. If it's worth it to peak-shave with batteries, it's almost certainly going to be more effective for companies to do it at scale and with expertise. The only reason it might make sense for consumers to do it is because of the retail-wholesale pricing difference, but if home batteries become popular, you can bet that loophole will be closed.

Source: I used to work at a utility

P.S. Another big problem is systems control. It is very hard to predict how decentralized actors will work side by side. For example, you don't want to change the price of electricity by a cent and then have 10 MW of demand instantly come on across the state just because everyone's Nest price threshold was hit. There are many plausible sounding solutions to this problem (price fuzzing, delays, subpenny pricing), but they have difficult edge cases as well.

paulyg2• 12 years ago

I agree that there would be economies of scale to saving up energy at off peak times for use on peak. But the only way I know of this happening on the MW scale is pumped storage. Utility pumps water up into a reservoir all night and then let's it back down through Hydroelectric generators the next day. But the ability to do this is limited by geography. Maybe we are at a turning point. The island of Ohau recently put out an RFQ for a large energy storage system. Will be interesting to see if and who bids.

The Lowly Thermostat, Now Minter of Megawatts

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